Betsy DeVos Pushes New Federal Tax Credit to Expand School Choice

U.S. Secretary of Education Betsy DeVos, who has had trouble selling her school choice agenda in Washington, has thrown her weight behind new legislation to establish a federal tax credit to expand choice.

The measure, which faces long odds in Congress, would offer a new federal tax credit for individuals and companies that donate to organizations offering scholarships to students. Under the plan, states would get to decide how big those scholarships are, which students and organizations would be eligible for them, and what could they could be used for.

Traditionally, tax-credit scholarship programs, which are on the books in 18 states, help low-income students or students in special education attend a private school. But under the proposal, states could also decide to direct them to apprenticeships, industry certifications, online learning, early-childhood education, summer school, dual-enrollment courses, home schooling, transportation costs for intradistrict choice, and more.

The proposal "will give hundreds of thousands of students across the country the power to find the right fit for their education," DeVos said in introducing the proposal at a department event Thursday. "And the biggest winners will be America's forgotten children who will finally have choices previously available only for the rich, the powerful, and the well-connected."

State tax credit scholarship recipients—including Denisha Merriweather, a DeVos staffer, and Sam Myers, a young man with Down Syndrome from Ohio—spoke at the event about how attending private schools changed their lives.

The legislation, versions of which are sponsored by Sen. Ted Cruz, R-Texas, and Rep. Bradley Byrne, R-Ala., is likely to run into major opposition from public educators and faces a tough road in Congress, where Democrats control the U.S House of Representatives.

Even Republican lawmakers have been skeptical of broadening the federal role in K-12 education to advance choice. In fact, opposition from conservatives helped doom a previous, behind-the-scenes attempt to create a similar program back in 2017.

Leading Democrats on Capitol Hill were quick to deride the newest proposal as an attack on public education.

"Secretary DeVos keeps pushing her anti-public school agenda despite a clear lack of support from parents, students, teachers, and even within her own party," said Sen. Patty Murray of Washington state, the top Democrat on the Senate education committee in a statement. "Congress has repeatedly rejected her privatization efforts, and she should expect nothing less here. This proposal is dead on arrival."

Rep. Bobby Scott, D-Va., the chairman of the House education committee, said in a statement, "House Democrats will not waste time on proposals that undermine public education."We're focused on reversing our chronic underfunding of public schools so that all students—regardless of their background—can learn in schools that are healthy, safe, and provide a quality education."

But Cruz said he hopes the legislation can generate cross-aisle support.

"We've got to build a coalition broad enough to move Democrats," he said. "We're going to have to see some courage on the part of Democratic members of Congress to put kids ahead of partisan political interests. Neither Secretary DeVos or I are remotely Pollyannaish about this. We're not suggesting this is an easy fight. But we are suggesting this is the right fight to have."

DeVos noted that there is bipartisan support for the scholarships in states that have already adopted them.

Under the measure, individuals would be able to contribute up to 10 percent of their adjusted gross income to state scholarship-granting organizations. Businesses could give up to 5 percent of their net taxable income. Individuals in a state that opts not to create a scholarship-granting organization could donate to one in another state that has such a program (say, Florida).

Under Byrne's legislation, which has the suppport of the administration, there would be a $5 billion annual cap on the tax credits. The money would be allocated to states, at least initially, based on the formula for distributing state funds for teacher quality, which focuses mostly on poverty, but also on total population.

Cruz's bill includes identical language, but also would allow for an additional $5 billion for scholarships for workforce training. That's designed in part to appeal to Democrats, he said.

'Voucher Scheme'

Public education advocates, who have long criticized tax credit scholarship programs as a "voucher scheme," vehemently oppose the proposal.

"It's ludicrous that the [Trump] Administration is willing to redirect $5 billion in federal funding to champion private school voucher schemes that have been proven ineffective in improving academic achievement and fail to serve all students," said Sasha Pudelski, the co-chair of the National Coalition for Public Education and the director of advocacy for AASA, the School Superintendent's Association. "Rather than attempt to meet the current unfunded mandates in federal education, like [special education], the Administration would rather throw money at a scheme designed to defund public schools further. This proposal is shockingly poor in both conception and design."

Pudelski worries the proposal could siphon off money from public education. For instance, when Alabama enacted its tax-credit scholarship program, the state had to set aside $40 million to absorb the anticipated loss in revenue from the credit, she said.

Perhaps more significantly for DeVos and company, the conservative Heritage Foundation, an influential think tank, isn't a fan of the proposal.

"Although the administration's support for school choice is praiseworthy, a broad-based federal tax-credit scholarship program fundamentally goes in the wrong direction," said Lindsey Burke, the director of Heritage's Center for Education Policy. "It would expand, not shrink, federal intervention in K-12 education."

DeVos and Cruz rebuffed that criticism at the department event.

"The Heritage Foundation is absolutely wrong," said DeVos. "There's nothing in this legislation that would intrude on state's rights. In fact, it really was crafted to respect states' rights." For his part, Cruz said he's "happy to put my conservative chops up against just about anyone."

Former Florida Gov. Jeb Bush, who championed a similar school choice program in his home state, applauded the plan.

DeVos and her team began working backstage on a tax-credit scholarship program proposal shortly after taking office, and it would likely have had a better chance of passing when Republicans controlled Congress.

The secretary had reportedly hoped to get the plan included in the broader tax overhaul bill, which passed in late 2017. But President Donald Trump told her it wasn't politically feasible, sources say. That was likely due in part to opposition from conservatives, including the Heritage Foundation.

The consolation prize: language in the law, championed by Cruz, allowing families to use 529 college saving plans to pay for private school tuition. DeVos has acknowledged that this wouldn't do much to directly help low-income families.

DeVos has also had a tough time advocating for other pieces of her school choice agenda on Capitol Hill. A GOP-controlled Congress rejected a pitch for a $1 billion competitive grant for choice, including school vouchers, released as part of Trump's budget last year.

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